The International Air Transport Association says the airline industry will lose $4.7 billion this year.
It says revenues are expected to fall by 12 per cent to $467 billion, worse than after the events of September 11, 2001.
IATA CEO Giovanni Bisignani says the state of the industry is grim and has deteriorated much more rapidly than could have been anticipated.
The group, which represents 230 airlines worldwide, says passenger traffic is expected to drop by 5.7 per cent over the year.
Cargo demand will decline by 13 per cent. The figures released today are significantly worse than IATA's previous forecast in December.